Among the international factors affecting China’s textile foreign trade exports, although Vietnam has not exerted significant direct pressure through strict tariffs, frequent trade remedy investigations, or other direct trade policies, its rapid expansion of the textile and apparel industry and precise market positioning have made it a core competitor of China in the global textile market—especially the U.S. market. The indirect impact of its industrial development dynamics on China’s textile foreign trade exports is continuously deepening.
From the perspective of industrial development paths, the rise of Vietnam’s textile and apparel industry is no accident, but a “cluster-based breakthrough” supported by multiple advantages. On one hand, Vietnam boasts a labor cost advantage: its average manufacturing salary is only 1/3 to 1/2 of China’s, and its labor supply is sufficient, attracting a large number of international textile brands and contract manufacturers to deploy production capacity. For instance, global renowned apparel brands such as Uniqlo and ZARA have transferred over 30% of their garment OEM orders to Vietnamese factories, driving Vietnam’s garment production capacity to increase by 12% year-on-year in 2024, reaching an annual output of 12 billion pieces. On the other hand, Vietnam has built market access advantages by actively signing Free Trade Agreements (FTAs): the Vietnam-EU Free Trade Agreement (EVFTA) has been in effect for years, allowing Vietnamese textile and apparel products to enjoy duty-free treatment when exported to the EU; the bilateral trade agreement reached with the U.S. also provides more preferential tariff conditions for its products to enter the U.S. market. In contrast, some of China’s textile products still face certain tariffs or technical barriers when exported to the EU and the U.S. Additionally, the Vietnamese government has accelerated the improvement of the full industrial chain layout (covering spinning, weaving, dyeing, and garment manufacturing) by establishing textile industrial parks and offering tax incentives (e.g., newly launched textile enterprises can enjoy a 4-year corporate income tax exemption and a 50% reduction for the subsequent 9 years). By 2024, the local supporting rate of Vietnam’s textile industrial chain had risen from 45% in 2019 to 68%, significantly reducing its reliance on imported fabrics and accessories, shortening production cycles, and enhancing order response speed.
This industrial advantage has been directly converted into a rapid increase in international market share. Especially against the backdrop of lingering uncertainties in China-U.S. textile trade, the market substitution effect of Vietnam on China has become increasingly prominent. Data on U.S. apparel imports from January to May 2025 shows that China’s share of U.S. apparel imports dropped to 17.2%, while Vietnam surpassed China for the first time with a 17.5% share. Behind this data lies the ebb and flow of competition between the two countries in segmented categories. Specifically, Vietnam has demonstrated remarkable competitiveness in labor-intensive fields such as cotton garments and knitted apparel: in the U.S. market, the unit price of cotton T-shirts exported by Vietnam is 8%-12% lower than that of similar Chinese products, and the average delivery cycle is shortened by 5-7 days. This has prompted U.S. retailers like Walmart and Target to shift more orders for basic-style apparel to Vietnam. In the field of functional apparel, Vietnam is also accelerating its catch-up. By introducing advanced production lines from China and South Korea, its sports apparel export volume exceeded 8 billion U.S. dollars in 2024, a year-on-year increase of 18%, further diverting mid-to-low-end sports apparel orders that originally belonged to China.
For Chinese textile foreign trade export enterprises, the competitive pressure from Vietnam is not only reflected in the squeeze of market share but also forces Chinese enterprises to accelerate their transformation. On one hand, some Chinese textile enterprises that rely on the U.S. mid-to-low-end market are facing the dilemma of order loss and profit margin narrowing. Small and medium-sized enterprises, in particular, lack brand advantages and bargaining power, putting them in a passive position in price competition with Vietnamese enterprises. They have to maintain operations by reducing profit margins or adjusting their customer structure. On the other hand, this competition has also driven the upgrading of China’s textile industry toward high-end and differentiated development: a growing number of Chinese enterprises have begun to increase R&D investment in green fabrics (such as recycled polyester and organic cotton) and functional materials (such as antibacterial fabrics and intelligent temperature-control fabrics). In 2024, the export volume of China’s recycled textile products increased by 23% year-on-year, outpacing the overall growth rate of textile exports. At the same time, Chinese enterprises are also strengthening brand awareness, improving the recognition of their own brands in the European and American mid-to-high-end markets by participating in international exhibitions and cooperating with overseas designers, so as to get rid of “OEM dependence” and reduce reliance on a single market and low-price competition.
In the long run, the rise of Vietnam’s textile industry has become an important variable in reshaping the global textile market pattern. Its competition with China is not a “zero-sum game” but a driving force for both sides to achieve differentiated development in different links of the industrial chain. If Chinese textile enterprises can seize the opportunity of industrial upgrading and build new competitive barriers in areas such as technological R&D, brand building, and green manufacturing, they are still expected to consolidate their advantages in the high-end textile market. However, in the short term, Vietnam’s competitive pressure in the mid-to-low-end market will persist. China’s textile foreign trade exports need to further optimize the market structure, expand emerging markets along the “Belt and Road,” and improve the synergy efficiency of the industrial chain to cope with new challenges in global market competition.
Post time: Aug-15-2025